Tryg A/s · OMXCOP:TRYG
Tryg A/s — KBW European Financials Conference 2015
18 slides from Tryg A/s's conference presentation, Sep 15, 2015
Slide 1: KBW European Financials Conference
KBW European Financials Conference London - 15 September 2015 Tor Magne Lønnum, CFO Follow us on Twitter: @TrygIR
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation are based on the beliefs of our management as well as assumptions made by and information currently available to the management. Forward-looking statements (other than statements of historical fact) regarding our future results of operations, financ
Slide 3: Tryg – at a glance I
Tryg – at a glance I Gross premium split by products 2014 • Tryg goes back to 18th century. 10 • Very strong brand position especially in Denmark. 31 Motor 14 Workers' comp • Non-life insurance in Denmark, Norway and Sweden. Health & accident Percentage • Approx. 80% retail business. Liability Norwa
Slide 4: Tryg – at a glance II
Tryg – at a glance II Low risk investment portfolio 60% Standard deviation 2011-2013 50% • Tryg goes back to 18th century. 40% 30% • Very strong brand position especially in Denmark. 20% 10% • Non-life insurance in Denmark, Norway and Sweden. 0% • Approx. 80% retail business. Shareholder performance
Slide 5: Structure of the Nordic insurance market
Structure of the Nordic insurance market Nordic Denmark EUR 25.1bn (as at Q4-2013) DKK 51.0bn/EUR 6.8bn (as at Q2-2014) 9.9 18.2 4.7 Tryg Tryg 30.0 Topdanmark Topdanmark 41.0 If If Percentage Codan Percentage Codan 17.6 17.7 Gjensidige Gjensidige Länsforsikringar Alm. Brand 9.0 Other 9.8 Other 6.1 9
Slide 6: Tryg’s equity story
Tryg’s equity story Leading Scandinavian insurer with strong track record Financial targets 2017 Customer targets 2017 • ROE: ≥21% • NPS +100% Low risk and high Customer care worth returns • Combined ratio: ≤87% • Retention rate +1 pp recommending • Expense ratio: ≤14% • ≥ 3 products +5 pp • Matchin
Slide 7: We aim to improve NPS to drive retention and engagement
We aim to improve NPS to drive retention and engagement Correlation between Correlation between Correlation between retention and NPS loyalty and NPS engagement and NPS 96 35 50 94 45 30 40 92 25 35 90 20 30 25 88 15 20 10 15 86 10 5 84 5 0 0 82 Tryg DK Tryg NO Tryg DK Tryg NO Moderna 80 Retention R
Slide 8: Customer highlights Q2 2015
Customer highlights Q2 2015 - Continued improvement in Net Promoter Score (NPS) • New price-differentiated products launched: • Personal accident insurance in both Denmark and Norway • Holiday home insurance in Norway NPS • Change of car ownership insurance in Denmark 22 20 • The new car insurance l
Slide 9: Building pricing power
Building pricing power Number of pricing criteria per product – old vs. new Avg. new product: 49 criteria Avg. old product: 16 criteria Pricing competetivness 2013 2014 2017 Tariffs less advanced than peers Tariffs at peers level Tariffs more advanced than peers 9
Slide 10: Reductions in expenses and claims costs
Reductions in expenses and claims costs Efficiency programme 2012 - 2015 Efficiency programme 2015 - 2017 Expense Expense reduction reduction DKK DKK 750m 1,000m Claims Claims reduction reduction Expense reduction 2015 - 2017 Claims reduction 2015 - 2017 DKKm DKKm 10
Slide 11: Expense reductions towards 2017
Expense reductions towards 2017 Sourcing • Staff functions • Business areas DKK Simplification • First contact resolution 250m • Reduced lead time at customer contacts • Continuous improvement Improved retention rates Sourcing criteria Sourcing in Tryg 1. Customer experience 2013: IT 2014: Finance 2
Slide 12: Expense ratio improved from 15.4 to 15.2
Expense ratio improved from 15.4 to 15.2 • Expense ratio improved from 15.4 in Q2 2014 to Expense ratio 15.2 in Q2 2015 – (adjusted for one-off effects in Q2 2014). • 2015 will be impacted by one-off costs related 16.6 16.4 to new efficiency programme. 15.6 15.4 * 14.6 15.2 • Efficiency programme de
Slide 13: New claims initiatives towards 2017
New claims initiatives towards 2017 Utilising spend data and transparency from In4mo system. Dedicated competence team to help customers quickly back to DKK normal life. DKK 500m 500m Further consolidation and utilisation of Nordic procurement volume. Enhanced fraud detection. Reduction in suppliers
Slide 14: Improved underlying claims ratio
Improved underlying claims ratio Group Private (DK & NO) Commercial (DK & NO) 68.3 68.8 63.6 62.8 70.0 69.5 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Corporate Sweden 79.3 76.5 75.6 72.8 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Underlying development is adjusted for large claims, weather claims, run-of
Slide 15: Gross earned premiums reduced by 1.4%
Gross earned premiums reduced by 1.4% Gross earned premiums reduced 1.4% (-1.2%) related to: • Private impacted by the competitive situation. Retention was stable in Denmark but decreased slightly in Norway • Commercial Norway impacted by a weaker economic situation and the competitive situation • C
Slide 16: Capital structure
Capital structure Capital – Q2 2015, DKKm • Capital buffer based on Individual Solvency decreased to 51% (Q1 2015: 55%) and was impacted by: • Results Q2 2015 Excess capital • Executed share buy back of 2015 and H1 cash dividend 2015 3,400 Buffer • Based on Solvency II standard model, the capital bu
Slide 17: Tryg’s equity story
Tryg’s equity story Leading Scandinavian insurer with strong track record Financial targets 2017 Customer targets 2017 • ROE: ≥21% • NPS +100% Low risk and high Customer care worth returns • Combined ratio: ≤87% • Retention rate +1 pp recommending • Expense ratio: ≤14% • ≥ 3 products +5 pp • Matchin
Slide 18: Questions?
Questions? 18